How to register an LLC or corporation in Puerto Rico

Registering an LLC (limited liability company) or a corporation means creating a legal person separate from you. From that point the entity can hold its own name, its own accounts and its own obligations, and it generally separates the business’s assets from the owners’ personal assets. The filing is made with the Department of State, which maintains the registry of corporations and entities. An LLC and a corporation are not the same thing: they are governed differently and taxed differently, and that decision is worth discussing with a CPA or an attorney before you file, because changing it later is more work than choosing well up front.

Any adult can organize an entity in Puerto Rico, and you do not need to be a resident or a U.S. citizen to be an owner. What the registry does require is that the entity have a resident agent in Puerto Rico with a physical address on the island, who receives legal notices on the entity’s behalf. Entities already organized outside Puerto Rico that want to operate here do not organize again: they register as a foreign entity, which is a separate filing within the same registry.

• A name for the entity that is available in the corporate registry and not confusingly similar to one already registered.
• A resident agent in Puerto Rico with a physical address on the island, authorized to receive legal notices for the entity.
• A physical address and a mailing address for the entity.
• Information about the organizers, and about the members, managers or directors depending on the entity type.
• An account in the Department of State online system to file and track the application.
• A payment method accepted by the system for the applicable filing fees.

• Certificate of organization (LLC) or certificate of incorporation (corporation), which is the document being filed.
• Current photo identification of the person filing.
• Consent or designation of the resident agent, when the system requires it.
• For foreign entities, proof of good standing from the home jurisdiction.

1. 1

   Step 1: Decide which entity type fits you

   LLCs and corporations are managed and taxed differently, and there are variants (a nonprofit corporation, for instance) with their own rules. This decision affects your taxes from day one, so it is worth discussing with a CPA or an attorney before filing rather than after.

2. 2

   Step 2: Check that the name is available

   Search the name in the corporate registry before committing to it. A name too similar to one already registered gets rejected, which sends you back to the start after you have printed signage or bought a domain. Also remember that being available in the registry is not the same as being free of registered trademarks.

3. 3

   Step 3: Designate a resident agent

   The resident agent receives legal notices on the entity’s behalf and must have a physical address in Puerto Rico; a P.O. box does not work. You can serve as your own if you live on the island, or you can hire a third party. If that address stops being good and you do not update it, the entity stops receiving important notices.

4. 4

   Step 4: File the certificate in the online system

   Create your account in the Department of State system, complete the certificate of organization or incorporation, and pay the applicable fees. Review every field before submitting: misspelled names, addresses and identification numbers carry over into every later filing, and fixing them requires an amendment.

5. 5

   Step 5: Save your registration proof

   When the registry accepts the filing, the entity is registered and you receive proof with its registration number. Keep it: you will need it to open a bank account, for the Registro de Comerciante, and for nearly any permit.

6. 6

   Step 6: Continue with what comes next

   Registering the entity does not authorize you to operate. What usually follows is a federal employer identification number (EIN) from the IRS, the Registro de Comerciante with Hacienda if you will sell goods or services, and the municipal and OGPe permits your location requires. Registered entities also have annual reporting obligations with the Department of State; confirm which ones apply to your entity type.

Online, through the Puerto Rico Department of State registry of corporations and entities. The official site hosts the filing system, the name search and the current forms.

• Buying a domain, printing signage and ordering cards before confirming the name is available in the registry.
• Using a P.O. box as the resident agent’s address, when the registry requires a physical address in Puerto Rico.
• Believing that registering the entity is enough to start selling, without the Registro de Comerciante or the applicable permits.
• Choosing between an LLC and a corporation based on hearsay, without reviewing the tax implications with a CPA.
• Forgetting the annual reporting obligations with the Department of State and letting the entity fall out of good standing.

These are the government pages this guide is based on.

• Departamento de Estado de Puerto Rico

  Departamento de Estado

  www.estado.pr.gov

• Forms for corporations

  Departamento de Estado

  www.estado.pr.gov

• Registration of legal entities

  Departamento de Estado

  www.statedepartment.pr.gov